Monday, November 15, 2010

Kudler Fine Foods’ Legal Focus

Kudler Fine Foods’ Legal Focus

Kudler’s Legal Issues (1 POINT)

Kudler’s Fine Foods uses Anne Shousha as its legal counsel. Anne is Kathy Kudler’s sister-in-law and is a successful tax attorney with a prominent law firm in San Diego. Kathy relies on Anne for legal advice. Kathy asks Anne for legal advice during informal telephone calls or at family gatherings which are free, but formal meetings are 100 dollars per hour. Through this arrangement, Kathy has managed to keep the company’s legal expenses to a minimum. Anne suggest to Kathy that litigation cases such as slip and fall accidents should be settled out of court because court is like "throwing the dice" (Kudler’s Fine Foods, 2003). In every case reported to Anne by Kathy, she has always suggested settlement over court. Although Kudler is a small business and have no legal issues at this moment, it could happen anytime and also there are always those people looking for an easy dollar and willing to sue anyone to get it. So, to avoid such legal issues Kudler should have a sound legal system in place (Kudler’s Fine Foods, 2003).

Kudler and Industry Competitor(3 POINTS)

The Kroger Co. Headquartered in Cincinnati, Ohio, Kroger (NYSE:KR) is one of the nation's largest grocery retailers,that include grocery and multi-department stores, convenience stores and mall jewelry stores (The Kroger Co). Kroger has a separate Legal Department with a group of Lawyers to handle different Legal issues in the company. Kudler Fine Foods does not have a legal department. Kathy relies on a tax attorney for legal advice. A tax Attorney is not a correct choice to deal with legal issues so, better opportunity for the company’s success is to hire a qualified lawyer who is more educated and experienced in the legal workings of a business.

Kroger has faced a relatively long list of legal issues stemming from its acquisition of Fred Meyer and Ralph’s Grocery. Among them include a settlement in 2006 over illegal hiring practices that occurred during a 141 day labor dispute. Potential legal issues for Kroger have also loomed in connection with Ralph’s alleged improper accounting practices (Marketing Teacher Ltd, 2010). Although Kudler Fine Foods is a small business compared to Kroger, it has no legal issues at this moment, but has to deal with cases such as slip and fall accidents and are settled out of court to save on expense. Kudler follows responsible labor and accounting practices and is in compliance with the law and regulations (Kudler’s Fine Foods, 2003).

Resolution of Kudler’s Legal Issues (3 POINTS)

Torts: Any lawsuit filed for a physical, legal, or economic harm is going to fall under tort law. There are three kinds of torts – intentional, negligent and strict liability torts. If Kudler expands, it could expect Tort issues. Kudler could avoid any problem with the law by following legal procedures.

Negligence: “Persons who sell or supply food products for human consumption must exercise due care and diligence regarding the “fitness” of the product” (Food Safety and Technology, 2009). Food suppliers such as Kudler’s must exercise good food safety practices or else may be held liable for any negligence on their part that contaminated the food and caused persons who purchased the food to become ill.

Product liability: Product liability laws helps ”protect consumers from dangerous products, while holding manufacturers, distributors, and retailers responsible for putting into the marketplace products that they knew or should have known were dangerous or defective”(ExpertLaw). Kudler could avoid Product Liability cases by simply following good food safety practices.

Defamation: “Defamation is a legal action sounding in tort based on an intentional or reckless public false statement that injures another person's reputation. Libel and slander are types of defamation”(MegaLaw). To avoid defamation, Kudler should never use low-cost ingredients and it should live up to its claims about the product.

Injuries to customers: Employees working in the food industry can suffer from injuries, illnesses and deaths like any other workplace. Therefore food industry employees receive special instructions and training on how to prevent these injuries and follow occupational safety regulations. The Occupational Health and Safety Administration makes random safety inspections to food establishments to ensure the safety needs of the employees, customers and visitors are being met (Occupational Safety).

HR issues: Human resources can be a challenge for a small business. Legal aspects of recruiting and hiring should be a concern for any company. To make sure Kudler stays in compliance, it is advisable for them to regularly check their flow statistic to make sure they are not violating any rules or regulations.

Deployment of Compliance Database Tools (3 POINTS)

Kudler’s Fine Foods should modify its legal department to minimize or eliminate the risks of costly litigation lawsuits. To assist in avoidance strategies, Kudler could use Research compliance database tools such as LexisNexis which provides users with tools for electronic discovery, evidence management, case analysis, court docket tracking, e-filing, witness identification and most importantly legal document preparation which is much less expensive than hiring an attorney. Not every legal situation requires an attorney. Sometimes it can be resolved simply by creating and filing the proper legal forms. Sometimes the facts or details of a case are so "typical" or "common" that handling the matter on your own is simple, timely and cost-effective. In these types of situations, LexisNexis can help and keep the companies legal expense to a minimum (LexisNexis).